European energy policy

Introduction

European solutions are of the essence when it comes to reconciling the objectives of energy security, competitiveness, and climate change mitigation as the energy transition is progressing. The European climate and energy framework for 2030 and the legislative packages of the European Union for an energy union are of key strategic significance for the future direction of European and national climate and energy policies, and thus for the successful implementation of the energy reforms.

The European Union has set itself the aim of cutting EU greenhouse gas emissions by at least 40% by 2030 from 1990. Also, the proportion of renewables in the final energy consumption of the EU is to rise to 32% and EU primary energy consumption is to be cut by 32.5% compared with a reference scenario.

“Clean Energy for All Europeans” package

Together with the existing proposals on climate policy and the gas sector, the “Clean Energy for All Europeans” package forms the framework for the implementation of the Energy Union and the European climate and energy targets up to 2030. The package itself consists of four Directives and four Regulations:

the revised Renewable Energy Directive,

the revised Energy Efficiency Directive,

a next-generation Buildings Directive,

Regulation on the Governance of the Energy Union,

the revised Electricity Market Directive,

the revised Electricity Market Regulation,

the revised Regulation establishing an Agency for the Cooperation of Energy Regulators,

the Risk-Preparedness Regulation.

In June 2018, the European Parliament, the Council and the European Commission arrived at a compromise on the first sub-package of the “Clean energy for all Europeans” package of legislation (Renewable Energy Directive, Energy Efficiency Directive and Governance Regulation).

The core elements of the trilogue agreement are the setting of a 32% EU target for renewable energy in 2030 and an energy efficiency target of 32.5%, along with robust instruments to attain these objectives. In order to enter into force, these legal instruments now need to be formally adopted by the Council of Ministers and the European Parliament. The new version of the Buildings Directive entered into force on 9 July 2018.

The German government welcomes the compromise on the first sub-package as an important political success which shows that Europe is able to act. The agreement on ambitious but attainable objectives in combination with robust instruments for their implementation sends out a strong signal for a European energy transition. This will have a key impact on the energy transition in Germany over the next decade.

The revised Renewable Energy Directive

The revised Renewable Energy Directive will provide the EU with a new framework for the funding of renewable energy. The share of renewable energy in final energy consumption within the EU is to increase to at least 32% by 2030. In addition to common funding rules for electricity from renewables, the directive also addresses the heating and transport sectors, which account for two-thirds of energy consumption.

For example, the Member States will need to increase the share of renewable energy they use for heating and cooling by 1.3 percentage points from 2021 onwards. In the transport sector, the marketers of fuels are obliged to increase the share of renewable fuels by 14% by 2030 – largely via the use of new technologies such as electric mobility and power to X (using electricity to generate synthetic fuels). The updated Directive will also restrict the share of first-generation biofuels – biofuels that are produced from food crops.

The revised Energy Efficiency Directive

The revised Energy Efficiency Directive seeks to reduce primary energy consumption within the EU by 32.5% by 2030 compared with a reference scenario. Member States remain at liberty to decide on their indicative contribution towards the EU’s energy efficiency target for 2030. The key instrument for the implementation of the Directive – the energy efficiency obligation – has been strengthened and extended beyond 2020. In this context, real savings of 0.8% a year were agreed for the first time. Up until now, the Member States had to adopt measures to achieve 1.5%; however, there were a large number of exemptions by which countries could reduce this target to below the real rate of 0.8% which has now been agreed.

The revised Energy Performance of Buildings Directive (EPBD)

The revision of the Buildings Directive provides for a further development of the long-term renovation strategies currently covered by the Energy Efficiency Directive. In addition, the revision contains provisions permitting new buildings to become better equipped to cope with the future needs and possibilities of energy and transport infrastructure. The Directive anchors an arrangement to promote the creation of the necessary infrastructure for electric mobility: in future, new buildings with more than 10 parking spaces must include conduits to permit the provision of charging infrastructure. Regarding the inspections of heating and air-conditioning systems, there will in future be a further option in addition to the existing possibility of “alternative measures”: the fitting of building automation and control systems. The European Commission will also develop a smartness indicator to assess the technological capability of a building to regulate itself and communicate with the residents and the electricity grid.

The Governance Regulation

The new Regulation on the Governance of the Energy Union presents a new planning and monitoring system for the implementation of the goals of the Energy Union, and particularly the EU’s 2030 energy and climate targets. It provides that the Member States will adopt Integrated National Energy and Climate Plans (NEPCs) – similar to Germany’s Energy Concept – by 2030, and also develop long-term strategies to cut greenhouse gases and carbon emissions covering the period up until 2050. The Member States’ NEPCs will be mutually comparable and are to be the subject of consultation not only at the national level but also with neighbouring countries. This will foster better coordination of national energy and climate change mitigation policies in Europe. The NEPC drafts need to be submitted to the Commission by the end of December 2018, the final versions by the end of December 2019. Before this happens, consultations on them must take place with national stakeholders and neighbouring countries. The Governance Regulation also contains clear rules to ensure that the Member States meet the EU’s renewable energy and energy efficiency targets to be achieved by 2030. It provides that Member States must cite their national contributions to the EU’s 2030 targets for renewables and energy efficiency in their NEPCs. If the national contributions towards the targets are insufficient to achieve the overall EU target, corrective “gapfiller” measures are envisaged at national and EU level.

Electricity market design

The second sub-package consists of four pieces of legislation in the field of the electricity market (Electricity Market Directive, Electricity Market Regulation, ACER Regulation, Risk-Preparedness Regulation). The intention is to restructure the European electricity market design and to complete work on the package by the end of 2018. The European electricity markets are to grow closer together and to be made fit for the growing proportion of intermittent renewable energy across Europe. Also, the rights and possibilities for final consumers in the electricity markets are to be strengthened.

The Federal Government believes that these provisions are also an important element in the efforts to implement the energy transition on a market-led, cost-efficient basis, to safeguard the supply of electricity across Europe, and to ensure appropriate participation of the final consumers in the electricity market.

State of the Energy Union 2015

1

19 December 1996

2

26 June 2003

3

16 February 2005

4

14 June 2006

5

10 January 2007

6

9 March 2007

7

13 July 2009

8

24 October 2014

9

25 February 2015

10

12 December 2015

11

30 November 2016

19 December 1996

The European Parliament and the Council adopt Directive No 96/92/EC putting in place uniform provisions for the internal electricity market (First Internal Electricity Market Directive).

26 June 2003

Adoption of the Second Internal Electricity Market Package.

16 February 2005

Entry-into-force of the Kyoto Protocols, which had been adopted in 1997 and which set out the first targets on limiting greenhouse gas emissions in the industrialised countries. Introduction of the EU emissions trading scheme.

14 June 2006

The European Commission’s Green Paper entitled 'A European Strategy for Sustainable, Competitive, and Secure Energy’ sets out the three main objectives for EU energy policy.

10 January 2007

Publication of the European Commission’s plan of action on energy entitled “An Energy Policy for Europe”.

9 March 2007

The European Council, with Germany holding the Presidency at the time, publishes a comprehensive programme for an “integrated EU energy and climate policy”. The three energy and climate targets for 2020 are set and become known as the “20-20-20” targets.

13 July 2009

Adoption of the Third Internal Energy Package by the European Parliament and the Council.

24 October 2014

Adoption of the Climate and Energy Framework for 2030 by the European Council.

25 February 2015

The European Commission tables its Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy.

12 December 2015

UN Climate Conference in Paris; adoption of a new international agreement replacing the Kyoto Protocols.

30 November 2016

The European Commission presents its legislative package entitled Clean Energy for all Europeans, which sets out detailed proposals for an overhaul of the energy framework, which is to deliver fresh progress towards the energy union and towards implementation of the targets for 2030.